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Social, Political, and Economic Order and Control in China

Paper Session

Sunday, Jan. 6, 2019 1:00 PM - 3:00 PM

Hyatt Regency Atlanta, Hanover D & E
Hosted By: Association for Comparative Economic Studies
  • Chair: Weijia Li, Monash University

Procrastination and Optimal Censorship Strategy: Experimental Evidence from China

David Yang
,
Stanford University

Abstract

The Chinese government deploys porous Internet censorship to effectively control citizens’ access to information. In particular, the censorship apparatus often throttles, rather than completely terminates, the connection to certain websites. This project aims to understand what makes this strategy work. We propose a hypothesis that the censorship regime takes advantage of citizens’ procrastination tendency, such that when the costs (e.g. inconvenience) imposed by the censorship is modest, citizens are unwilling to exert immediate effort to seek censorship circumvention tools. We test this hypothesis in the field among 1,800 university students in Beijing. We use state-of-the-art experimental methods to elicit students’ present bias and time inconsistency. We then investigate whether students’ present bias is predictive of their decision to circumvent the censorship prior to the experimental intervention. We then examine whether present bias is an important parameter that predicts take-up and usage when censorship circumvention tools are randomly provided to students. Finally, we calibrate a simple model of present biased agents to simulate the optimal level of costs the censorship regime could impose on citizens in order to achieve highest level of information control.

Factions in Nondemocracies: Theory and Evidence from the Chinese Communist Party

Patrick Francois
,
University of British Columbia
Francesco Trebbi
,
University of British Columbia
Kairong Xiao
,
Columbia University

Abstract

This paper investigates, theoretically and empirically, factional arrangements within the Chinese Communist Party (CCP), the governing political party of the People's Republic of China. Our empirical analysis ranges from the end of the Deng Xiaoping era to the current Xi Jinping presidency and it covers the appointments of both national and provincial officials using detailed biographical information. We present a set of new empirical regularities within the CCP, including substantial leadership premia in the Politburo and Central Committee, intra-faction competition for promotions, and systematic patterns of cross-factional mixing at different levels of the political hierarchy. An organizational economic model suited to characterizing factional politics within single-party nondemocratic regimes rationalizes the data in-sample and displays excellent out-of-sample performance.

Erosion of State Power and the Political Boundaries of Corruption

Weijia Li
,
Monash University
Gérard Roland
,
University of California-Berkeley
Yang Xie
,
University of California-Riverside

Abstract

How do corruption and the state apparatus interact, and how are they connected to the political and economic dimensions of state capacity? Motivated by historians' analysis of powerful empires, we build a model that emphasizes the corrosive effect of corruption on state power. Under general assumptions about fat-tailed risk, we show that the optimal response for the head of the state apparatus is an endogenous lexicographic rule whereby local corruption is maintained at such a level that no erosion of state power is tolerated. We further investigate the conditions under which deviation from the lexicographic rule, over-tolerance of corruption, and erosion of state power become possible, showing a non-monotonic relationship in the correlation between state power and corruption across different levels of fiscal capacity. Our results are consistent with empirical patterns in recent cross-country panel-data.

On Intergovernmental Communication: A Tale of Two Decentralization Reforms

Shiyu Bo
,
Jinan University
Liuchun Deng
,
Halle Institute for Economic Research
Yufeng Sun
,
Chinese University of Hong Kong
Boqun Wang
,
Renmin University of China

Abstract

Motivated by the contrasting experience following the two waves of decentralization in China, we develop a formal model of inter-governmental communication to study the impact of decentralization on economic performance under an authoritarian regime. Decentralization shifts the decision power of policy-making from the central government to the local. The local government has the information advantage, but it also has the loyalty concern, the political incentive to follow the policy prescriptions from the central. We show that the loyalty concern impacts the economic outcome of decentralization by distorting inter-governmental transmission of information as well as final policy-making. A strict adherence to the central could render decentralization welfare-reducing, causing low output and high volatility.
We offer several theoretical extensions to highlight the underlying mechanisms and demonstrate the robustness of our results.
port for our model.
Discussant(s)
Sergei Guriev
,
European Bank for Reconstruction and Development and Sciences Po
Guo Xu
,
University of California-Berkeley
Yu-Hsiang Lei
,
Yale-NUS College
Bei Qin
,
University of Hong Kong
JEL Classifications
  • P2 - Socialist Systems and Transitional Economies
  • M5 - Personnel Economics